The fight over the future of Canada’s wireless business is as serious as a funeral parlour. BCE Inc. chief executive George Cope says he is spending “130 per cent” of his time on the campaign to overturn Ottawa’s existing telecom policy. Industry Minister James Moore has begun a cross-country speaking tour to explain to Canadians why he’s standing firm.
But you can always count on media mogul Pierre Karl Péladeau to inject some entertainment into the most critical business matters.
Never one to pass on a good fight, Quebecor Inc.’s vice-chairman fired off an open letter to newspapers this week in which he denounced the Big Three wireless companies’ “shrill propaganda campaign designed to sow fear.” He even congratulated Ottawa for standing up to BCE Inc., Telus Corp. and Rogers Communications Inc. “latest bullying tactics.”
Mr. Péladeau, of course, would be quick to recognize a propaganda campaign when he sees one. The Big Three’s public-relations effort bears striking similarities to the one his company waged with Cogeco Inc. last year against BCE’s acquisition of Astral Media Inc. Both made extensive use of advertising and promoted a website where you can send your comments as a concerned Canadian with the click of a mouse. Both have raised the spectre of a “bogeyman,” to paraphrase Mr. Péladeau.
But while there are parallels between the “Say no to Bell” and the “Fair for Canada” campaigns, there is a striking difference between the two. While Mr. Péladeau is fiery, never in his wildest outbursts would he attack a cabinet minister the way a BCE director criticized Mr. Moore this week. That is like picking a fight with a customs agent. You might be right – and the telcos are right when they say it is foolish for Canada to offer a preferential access to its wireless market to American companies when Canadian companies can’t easily enter the United States. But insulting the guy who can frisk you naked is a terrible idea.
BCE board member Anthony Fell did not merely accuse the government of arrogance and hint that the newly-appointed Mr. Moore is an imposter when it comes to telecom expertise. He did it with BCE’s assent. Mr. Cope knew of and implicitly endorsed the letter Mr. Fell sent to the National Post. No wonder things have gotten personal – on all sides of the issue.
This huge blunder is reminiscent of the arrogance with which BCE executives breezed into the CRTC’s hearings a year ago as if Astral’s acquisition was a done deal. BCE was able to make up for its miscalculation with a less ambitious deal that quelled the regulator’s fears of market dominance.
This time around, it is unlikely BCE and its allies will get such a second chance.
There is only one month left before prospective bidders must formally apply for next year’s auction of the 700 megahertz spectrum. That spectrum is highly coveted because it allows signals to travel long distances and penetrate buildings easily, improving service to phone users.
That leaves little time for the Big Three to defuse what has become an explosive situation. With their strident rhetoric and their big-budget advertising campaign, the telecom companies have cornered the Conservatives, leaving the government with no elegant way out by signalling that they might be willing to compromise on the auction rules. For the government to back down now would mean losing face – and Stephen Harper’s Conservatives would rather eat worms than that.
The telcos also appear oblivious to the current political context. The Conservatives are engulfed in the Red Chamber’s spending scandal, which is dragging on as investigations widen on senators’ dubious living and travel expense claims. The whole Senate controversy has made the Conservatives come across as out of touch with working-class Canadians, on top of being unfaithful to their early promises of Senate reform. For the government to be somewhat sympathetic to the long-reviled telcos, the Big Three needed to win over consumers with its Fair for Canada campaign – not just unions or high level CEOs.
This was not necessarily impossible. Prices for mobile phone services in Canada have actually moved downward in recent years. Networks and speeds have improved. Canada now stands in the middle of the pack on price compared to five other developed countries, according to Wall Communications, which might explain why the Ottawa firm’s research is quoted both by supporters and detractors of the Big Three.
But given that the Harper government has now launched a counteroffensive to defend its plan to increase competition in Canada’s wireless industry, the Big Three’s hopes look about as weak as a cell signal in an underground garage.